OREGON DIVISION OF FINANCE AND CORPORATE SECURITIES

THE INVESTIGATION CONCERNS ALLEGED OUTSIDE INVESTMENTS NOT DISCLOSED TO MR. RAHMAN'S EMPLOYER.

ATTORNEY FOR CUSTOMER STATES BETWEEN 1/99 AND 2/01, ADVISOR FAILED TO MANAGE CUSTOMER'S ACCOUNT CONSERVATIVELY AS SHE INSTRUCTED, ESPECIALLY THE 71 YEAR OLD CUSTOMER'S IRA ACCOUNT, CUSTOMER ALLEGES DAMAGES OF $223,782.

$223,782.00

$115,000.00

CLIENT ALLEGES UNSUITABILITY AND FAILURE TO DIVERSIFY PORTFOLIO. CLAIMS COMPENSATORY DAMAGES OF $264,062. ADVISOR DISPUTES THE CLAIMS AND WELCOMES THE OPPORTUNITY TO DISCUSS THE CASE IN FURTHER DETAIL WITH CURRENT OR PROSPECTIVE CLIENTS. SETTLED IN MEDIATION WITH WACHOVIA

CLAIMANTS ALLEGE FIRST UNION SECURITY INCORRECTLY DETERMINED THAT SHARES OF WASATCH INTERNATIONAL CORPORATION WERE RESTRICTED UNDER RULE 144. CLAIMANTS FURTHER ALLEGE THE FIRM UNDERTOOK WRONGFUL ACTIONS REGARDING THEIR SHARES, THEREBY CAUSING THEM DAMAGES.

$285,000.00

$72,380.54

THE NASD ARBITRATION PANEL AWARDED THE CLAIMANTS THE SUM OF $72,380.54.

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

Permitted to Resign

VIOLATION OF EMPLOYER'S RULES.

CLAIMANTS ASSERTED CLAIMS AGAINST MERRILL LYNCH, ADVISOR'S EMPLOYER, AND RESPONDENT. ADVISOR SUCESSFULLY DEFENDED HIMSELF AGAINST THE ALLEGATIONS. HOWEVER, MERRILL LYNCH CHOSE TO SETTLE THE CLAIMS IN THE CASE. MERRILL LYNCH FORCED ADVISOR TO RESIGN AFTER MANAGEMENT REVIEWED THE CUSTOMER SETTLEMENT. RESPONDENT SUED MERRILL L LYNCH ALLEGING, INTER ALIA , WRONGFUL DISCHARGE AND DISCRIMINATION. MERRRILL LYNCH SETTLED THE CLAIM.